Verizon will make record-setting restitution for overcharging "pay as you go" …

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Verizon Wireless has just agreed to make the largest payment in FCC history, after the company admitted that it had billed users for millions of dollars in unintentional data use. The company will pay a whopping $25 million straight to the US Treasury and will refund at least $52 million to 15 million Verizon customers. It has also agreed to end these sorts of "mystery fees."

The fees were so mysterious because many customers had no idea how they were incurred, but each was so small that relatively few people complained. According to an FCC investigation, the fees could be incurred four different ways:

Unsuccessful attempts to access data when there was insufficient network coverage to complete the requested data transfer; and

Unwanted data transfers initiated by third parties and affecting customers who had content filters installed on their phones.

The fees have been paid by those without unlimited data plans since 2007. These "pay as you go" rates for data were $1.99 per megabyte or fraction thereof.

"Mystery solved: today's settlement with Verizon Wireless is about making things right and putting consumers back in the driver’s seat," said FCC enforcement chief Michele Ellison today. "Today’s settlement requires Verizon Wireless to make meaningful business reforms, prevent future overcharges, and provide consumers clear, easy-to-understand information about their choices. I am gratified by the cooperation of the Verizon Wireless team in the face of these issues, and pleased they are taking the high road."

That high road includes a set of commitments, including an end to these fees, reimbursement of customers, and a "data block" that customers can elect to have placed on their phones. In addition, Verizon will staff a Data Charge Task Force which will "monitor and resolve data charge complaints and other data charge-related issues going forward" and must report to the FCC.

FCC Chairman Julius Genachowski said the agreement sends a message to the public: "The FCC has got your back."

26 Reader Comments

Can we get an end to companies that automatically sign you up to their cell phone "media" service for silly flash games, charge you $15 automatically for the first month, and then you have to cancel, call and complain to get your $15 back? And they don't even tell you they're signing you up for a service; you don't find out until after they've done so.

Can we get an end to companies that automatically sign you up to their cell phone "media" service for silly flash games, charge you $15 automatically for the first month, and then you have to cancel, call and complain to get your $15 back? And they don't even tell you they're signing you up for a service; you don't find out until after they've done so.

It's called calling your phone company or accessing your myaccount with whichever provider and disabling third party purchases..

No, it should not be set default that way; read the agreements before clicking yes on your phone.

I'm not sure the people commenting appreciate the outcome. I don't think this fee was supposed to do Verizon in. It would be good enough if they refunded all the money they stole and made a commitment to not do it again (which is exactly what is happening). The fact that they are being fined any extra at all is just gravy.

The fact that the FCC stepped up to the plate at all and saw this through is the bigger accomplishment here, methinks.

Can we get an end to companies that automatically sign you up to their cell phone "media" service for silly flash games, charge you $15 automatically for the first month, and then you have to cancel, call and complain to get your $15 back? And they don't even tell you they're signing you up for a service; you don't find out until after they've done so.

Who does this? The phone carriers or the "silly flash games" companies? If it's the latter then that's a good reason to avoid silly Flash games. If its the former then I would be quite pissed off myself if that happened to me. I've never had anyone sign me up for anything because I don't go giving my cell number out to companies with fine print. Sounds like those stupid companies who would first sell you a snippet of an mp3 for $1.99 and then subscribe you to some crap listed in the fine print.

It's called calling your phone company or accessing your myaccount with whichever provider and disabling third party purchases..

Did you read the article? People were billed usurious fees even after they had "opted out" and blocked services on their account.

Quote:

No, it should not be set default that way; read the agreements before clicking yes on your phone.

Let me guess, you think $35 overdraft fees on a 52 cents overdraft are all fine and dandy too? Newsflash - there aren't always agreements to agree to and they aren't always easy to read and decipher on a phone, when they do exist. I know my brother never clicked "Yes" to an agreement to put $10 a month on his bill for sending his vote in to a contest, but he still got charged until we were able to get it removed. No refunds of course. And this was a classic case of pillar to post -- Sprint said speak to the third-party, the third-party didn't have a working phone number to call.

To Verizon's bottom line, this is equivalent to the money you lose to your sofa cushions each year.

While I am pleased that Verizon had to pay back the money it stole, I think this is nothing more than a glorified PR stunt agreed upon by both Verizon and the FCC. Verizon gets to look contrite and oh so sorry about this misunderstanding for a mere pittance. The FCC gets to look bold courageous and Genachowski gets to say "The FCC has got your back." And now they both have more political cover to screw their customers and citizens. I am tired of corporations and their executives getting "regulated" or slapped on the wrist for behavior that would send regular citizens to prison.

Can we get an end to companies that automatically sign you up to their cell phone "media" service for silly flash games, charge you $15 automatically for the first month, and then you have to cancel, call and complain to get your $15 back? And they don't even tell you they're signing you up for a service; you don't find out until after they've done so.

Who does this? The phone carriers or the "silly flash games" companies? If it's the latter then that's a good reason to avoid silly Flash games. If its the former then I would be quite pissed off myself if that happened to me. I've never had anyone sign me up for anything because I don't go giving my cell number out to companies with fine print. Sounds like those stupid companies who would first sell you a snippet of an mp3 for $1.99 and then subscribe you to some crap listed in the fine print.

Great, but do I get any type of reimbursement for all the time I spent talking with them to get those stupid fees removed? I'm sure I had to contact them at least 5-6 times.

Not to mention all those millions who just paid all the extra fees without bothering. I had to disable every feature on my phone but the ability to make calls to make them stop. Which took me three month to finally do.

Last time I went in the store I bought the phones from they told me I had to call CS to get that done. I will never use Verizon again after my contract is up.

I don't think that companies should be able to settle these fraud cases without an admission of guilt. It is simply too easy for them to explain it all as a mistake and settle with civil fines or deferred prosecution agreements. Of course thanks to all three branches of government for making widespread corporate fraud/theft for profit so hard to prosecute. DOJ and other agencies won't take on politically powerful entities, elected executive branch is afraid of looking too tough on big business, courts have virtually defined criminal fraud when committed by a large business out of existence, and Congress is as usual in big corporations pocket.

What I really don't understand is the fact that these large international companies with multi-billion dollar profits still feel like they still need to nickel n' dime every single customer. Seriously, I wouldn't be surprised if they charged their employees to use the toilet.

One theory I have is that these types of things are decided on by local devision chiefs who have to show profit increases.

All you libertarians out there where is the outrage? Oh ya, government and oversight is a bad thing. This is why we need more government intervention when it comes to ALL companies!

I don't see why Libertarians would have a problem with this outcome. They have a problem with government regulation: things like micromanaging corporations, assuming every company is guilty until they can prove themselves innocent through reams of paperwork, etc. They are not opposed to rule of law. This is fraud pure and simple, and should be treated as such.

My only problem is that the FBI hasn't brought them to court for criminal fraud charges. They are too damn busy unraveling our freedoms to do their real job, and thus it took a regulator to negotiate a settlement rather than just enforcing the laws we have.

The FCC's win/loss record as of late really curbs the enthusiasm, because this isn't a resurgence; it's a commentary on how bad and how glaringly obvious Verizon's "mistakes" were.

The ability to block data on phones isn't new; it's not advertised but I've used that feature repeatedly over the last 3 years to prevent employee phones from running up overages. My biggest complaint has and will continue to be the removal of blocks when changes are made to lines. You're allowed to put a range of blocks on lines, but when significant changes are made to the plan or a new device is activated on the line, all blocks are removed and can't be automatically re-applied.

And finally, the idea that the FCC really has the consumer's back... seriously? Even if I assume that the FCC's intentions are pure and pro-consumer, they're perpetually arriving on the scene two years too late, without any real case, or both.

Those who bitch about them not being fined enough who do you think those fines get passed down to?

It results in higher costs to the customer, putting Verizon at a disadvantage in the market place. Sounds fine to me. My only problem is contract lock-in prevents the market from working as well as it could in this case.

What I really don't understand is the fact that these large international companies with multi-billion dollar profits still feel like they still need to nickel n' dime every single customer. Seriously, I wouldn't be surprised if they charged their employees to use the toilet.

Pretty much close to that if you examine work rules in their "outsouced" call centers. Eevrything is timed - if they leave their station to for more than x minutes scheduled break they are in violation of rules. When you cal, if they spend more than x time to help you address your problem, that a negative on their record, etc.

Which is why you get the low level of "customer service" that prevails these days - its not because the cal center staff in Idaho, Pensacola or Mumbai or wherever are incompetent - its because that's the max level or service that has been priced into your customer account, so the rest can be taken out in executive bonuses and corporate profits.